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(This is CNBC Pro’s live coverage of Monday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Two of the biggest analyst calls on Monday came within the pharmaceutical and clean energy sectors. UBS raised its rating on Teva Pharmaceutical, citing a strong brand pipeline . Meanwhile, KeyBanc named hydrogen fuel cell stock Bloom Energy a top pick . Shares of Bloom Energy were little changed in the premarket, while Teva rose more than 2%. Check out the latest calls and chatter below. 8:08 a.m. ET: Jefferies says stay away from Splunk as acquisition plays out Jefferies moved to the sidelines on Splunk amid an acquisition announcement. The software company announced in September that it would be acquired by Cisco for $157 per share. The deal comes out to around $28 billion in equity value. Analyst Brent Thill raised his price target to $157 from $140, matching the deal’s price. Still, he downgraded shares to hold from buy. Thrill said the acquisition should benefit Elastic, Datadog and Dynatrace in the near term. “Our expert believes public vendors will have a 12 to 24 month window to win new business before Cisco reintroduces SPLK in its new format,” he said. “He believes that while Cisco has made some mistakes in the past, they will take their time and get this right.” — Alex Harring 7:54 a.m. ET: JPMorgan is ‘cautiously optimistic’ on Snowflake ahead of third-quarter earnings JPMorgan is retaining a “cautiously optimistic” stance on Snowflake ahead of the cloud data company’s third-quarter quarter earnings print due out Wednesday. “Our impression is that while the macro remains challenging overall, there is some sense of spending stability (albeit at a reduced level and with elevated spending scrutiny) among prioritized cloud infrastructure software providers even as new macro and geopolitical risks seem to emerge on a regular basis,” wrote analyst Mark Murphy in a note. “This stability may be enabling software vendors and customers to better navigate the environment and invest accordingly, a dynamic which seemed to be supported by Snowflake’s comments during the quarter,” he added. Murphy called the data cloud firm a “highly innovative” and “well-positioned” company poised benefit from artificial intelligence tailwinds. This quarterly print, he expects Snowflake to meet or top product revenue guidance due in part to what he views as “achievable” guidance and “directionally stable to slightly positive” data related to cloud consumption patterns. The Wall Street firm retained its $170 price target, implying that shares should remain rangebound from Friday’s close. The stock’s gained more than 19% in 2023. — Samantha Subin 7:45 a.m. ET: There could be significant upside ahead for Gracell Biotechnologies, Evercore ISI says Evercore ISI initiated coverage of Chinese biotech stock Gracell Biotechnologies at outperform on Monday, with analyst Jonathan Miller citing the company’s strong product pipeline as a catalyst. Gracell Technologies offers a unique approach to target multiple myeloma, a type of white blood cell cancer, the analyst said. The company grabbed attention at the 2023 American Society of Clinical Oncology annual meeting “with a potentially best-in-class media PFS [progression-free survival] of 38 months” in its phase 1 trial, currently ongoing in China. “Gracell is late to market, with a potential launch in 2027 and no established pharma partner yet, but even modeling only an extremely conservative share in MM [multiple myeloma], there is significant upside to the stock — compare GRCL’s market cap of ~$350M with competitors: Arcellx is at $2.5B in comparison — and they only launch in ’26/27!” Miller wrote. Miller also cited an opportunity in systemic lupus erythematosus as another key driver. “Utilizing CAR Ts in autoimmune diseases has become an increasingly hot space with a lot of pharma interest (expectations are for a multi-$Bn TAM),” the analyst added. “We’re only giving Gracell minimal credit at the moment for this very early program, but with FIH data expected in 1H24 this could easily become a significant value driver.” — Lisa Kailai Han 7:21 a.m. ET: Bank of America forecasts 26% upside for Arcos Dorados Bank of America thinks easing prices and increasing consumption should brighten the outlook for Arcos Dorados from here on out. Analyst Robert Ford Aguilar commended the company, which franchises McDonald’s restaurants in Latin America and the Caribbean, for its ability to mitigate costs while balancing prices. Strong same-stores and market share gains supported robust sales volume for the company in the last quarter. “Those capabilities should be further refined as ARCO continues to improve app adoption, functionality and algorithms. While sales growth should moderate on tougher comps and an Argentine recession, consumption in most other LatAm economies is forecast to improve,” he added. Aguilar also believes that these “favorable cost trends” will continue as costs of the company’s main proteins come down. These factors should continue to improve margins going forward, he added. Aguilar reiterated his buy rating for the stock but raised his price target to $14.50 from $12.50, which implies a 26% potential upside. — Lisa Kailai Han 7:07 a.m. ET: JPMorgan downgrades NanoString on recent legal setbacks Legal complications have complicated NanoString’s outlook, according to JPMorgan. In a Monday note, analyst Rachel Vatnsdal downgraded the biotech stock to neutral from its previous overweight rating and withdrew her 2024 price target. Earlier in November, the U.S. District Court for the District of Delaware ruled that NanoString’s GeoMx infringed on seven patents owned by Prognosys and exclusively licensed by 10X Genomics, a decision NanoString plans to appeal, Vatnsdal wrote. The company withdrew its guidance for both the fourth quarter and full year as it processes this outcome. “Stepping back, we remain bullish on the spatial market, overall, and while we acknowledge that NSTG’s spatial portfolio is competitive and has been getting traction across the scientific community, we see limited visibility given the pending litigation,” the analyst added. “All in, NSTG is facing litigation across majority of its Spatial portfolio both in the U.S and Europe which adds incremental layer of uncertainty.” — Lisa Kailai Han 6:48 a.m. ET: Citi downgrades Foot Locker to sell Foot Locker will end the year in a difficult position, according to Citi. “At current levels, we believe the risk/reward skews to the downside,” wrote analyst Paul Lejuez. “We believe FL will sacrifice margin near-term to get clean on inventory by year-end.” The analyst downgraded the stock to a sell rating from neutral as shares have risen above his $18 target price, which now implies a nearly 23% downside. Lejuez pointed to weaker web traffic and credit card data as reasons behind the downgrade. Additionally, he anticipates that management will lower its current full-year 2023 earnings guidance to reflect weaker numbers in the fourth quarter. These repercussions are likely to continue resonating for the company through 2024. “Given the headwinds they are facing in F23, we anticipate mgmt will strike a conservative tone on the top-line next year,” he wrote. — Lisa Kailai Han 6:45 a.m. ET: Mondelez can deliver higher performance ahead, RBC says RBC Capital Markets upgraded shares of Mondelez on Monday to outperform from sector perform, citing expected higher performance from the snack company. “We believe MDLZ can deliver towards the higher-end of its 3– 5% top-line algo through a combination of category growth, share gains, expanding its retail footprint, and securing more shelf space in existing stores with incremental growth from an active M & A strategy,” analyst Nik Modi said. The analyst’s price target of $83, up from $75, implies a potential upside of nearly 16%. “Given the growth drivers available to the company, we are very comfortable assuming the high-end of the company’s algo with a bias for over-delivery given the company’s M & A strategy,” he wrote. — Lisa Kailai Han 6:22 a.m. ET: Raymond James double downgrades Graphic Packaging Raymond James downgraded shares of Graphic Packaging , citing price-cost pressures in 2024 that can squeeze the stock’s valuation and performance. “Graphic’s previously provided preliminary 2024 outlook indicates margin pressure from a price headwind in 2024, and we believe commodity cost increases amid paperboard price declines pose risk to 2024 margins,” wrote analyst Matt Roberts. “Should history rhyme, we expect shares to remain range bound in the near term, similar to the period from 2016-2017 when price-cost headwinds drove margin deterioration and constrained valuation levels.” The analyst double downgraded the consumer packaging stock to market perform from strong buy. In the long term, however, Roberts remains constructive on the company’s structural margin improvement. He listed widening cost advantages and a shift from plastic to fiber products as catalysts. — Lisa Kailai Han 6:17 a.m. ET: UBS downgrades Jazz Pharmaceuticals as competitor risks emerge UBS sees risks ahead from competitors for Jazz Pharmaceuticals’ sleep portfolio. “The early launch metrics for AVDL’s Lumryz show that JAZZ is likely to face direct headwinds in narcolepsy,” wrote analyst Ashwani Verma in a note from Monday. The analyst downgraded the stock to neutral from buy and lowered his price target to $135 from $170, although this updated forecast still implies a potential 11% upside. Verma added that the next logical step for the company will be to focus on improving its business development efforts, although it’s unlikely that any such transactions will result in stock upside. — Lisa Kailai Han 6:05 a.m. ET: Morgan Stanley remains overweight Western Digital, underweight Micron Morgan Stanley reiterated its overweight rating on Western Digital . Shares of the technology firm, which specializes in NAND data storage, are up nearly 48% in 2023. But analyst Joseph Moore’s $52 price target implies 12% further upside for the stock. “Secular demand for NAND remains strong, despite near term pricing pressures. NAND business is also undervalued on a sum-of-the-parts basis,” the analyst wrote. In the same research note, Moore kept his underweight rating on shares of Micron , with his $71.50 price target corresponding to a 7% downside for the semiconductor stock. “While memory pricing is outperforming our expectations, our bigger miscalculation has been an expectation that valuation would be negatively impacted by the period of heavy losses that essentially contradicted every element of the bull case,” the analyst wrote. — Lisa Kailai Han 5:52 a.m. ET: Deutsche Bank names Saia a top pick Deutsche Bank named Saia one of its top picks on Sunday and reiterated its buy rating and $600 price target on the trucking company. The stock has already soared more than 100% this year, but analyst Amit Mehrotra thinks it could gain another 41% due to the company’s “remarkably resilient” earnings power. “What is even more remarkable about SAIA is that we’re projecting the company to grow EPS by 60% in 2024 and 2025,” the analyst wrote, noting that this is the second-best growth rate within its group of peers. “This growth potential, combined with earnings resiliency, have been key considerations of our steadfast bullish stance on SAIA and why it continues to be our top pick in 2024.” Specifically, market data shows that Saia’s perceived costs are currently under the perceived value of its services — meaning that there’s room for much higher prices, Mehrotra added. — Lisa Kailai Han 5:45 a.m. ET: KeyBanc names Bloom Energy a top pick KeyBanc Analyst Sangita Jain named Bloom Energy a top “clean tech” play, raising her price target on the stock to $20 from $19. The new target implies upside of 53%. “Rising demand for clean power from data centers, the trend toward industrial reshoring, and delayed interconnections of renewables all work in favor of BE as a provider of baseload, behind the meter, onsite clean power,” Jain wrote. “We believe that in an environment of elevated power prices, and time to power considerations, BE is well positioned to deliver on the targeted 30-35% top-line CAGR through 2031,” the analyst added. “BE’s fuel cells have proven commercial viability, come with an IP moat, and the co. is expected to be op. margin positive in ’23.” Bloom Energy shares have struggled this year, losing 30.1%. BE YTD mountain BE in 2023 — Fred Imbert 5:45 a.m. ET: UBS upgrades Teva Pharmaceutical on strong brand pipeline UBS sees potential in Teva Pharmaceutical’s upcoming pipeline of products. The bank upgraded the stock to buy from neutral in a Monday note and lifted its price target to $13 from $11. This updated forecast implies a 36% upside from the stock’s $9.55 close on Friday. “While the story in the past several years has been focused on Revenue/EBITDA stabilization, going forward we anticipate attention shifting to attractive brand assets, where investors get to participate in launch acceleration and pipeline de-risking catalysts,” wrote analyst Ashwani Verma. “Although sell-side expectations have come up on some brands/pipeline products, we believe that the stock is not pricing in brand transition.” Specifically, the analyst thinks that key brands such as Austedo, Uzedy and Ajovy will benefit as the company shifts its focus toward growth engine delivery. The outcomes of two key clinical trials, expected in the second half of 2024, are also due to boost the company’s brand pipeline. — Lisa Kailai Han
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